Trade Resources Industry Trends U.S.Jewelry and Watch Sales Across All Channels Fell 1.7 Percent Year on Year

U.S.Jewelry and Watch Sales Across All Channels Fell 1.7 Percent Year on Year

U.S. jewelry and watch sales across all channels fell 1.7 percent year on year to $5.386 billion in March, as estimated from preliminary government figures. According to Rapaport News calculations,  jewelry sales dropped 1.5 percent to $4.756 billion, while sales of watches contracted 2.9 percent to $630 million during the month. In addition, March became the sixth consecutive month to reflect a decline in sales for the sector.

As expected, given weaker consumer spending on jewelry, sales totals were revised lower for January (down 1.7 percent) and February (down 0.9 percent). Jewelry sales for the first quarter of 2014 have fallen 1.4 percent year on year to $14.2 billion, while watch sales dropped 3.2 percent to $1.9 billion.

Jewelry sales at specialty jewelers have registered a more severe decline for the first two months of the year, falling 5.8 percent year on year to $4.673 billion. Totals for March will be released in May.

As a point of reference, total U.S. jewelry sales in 2014 improved just slightly, or 0.5 percent, to $69.5 billion and watch sales rose 1.8 percent to $9.5 billion.

Given recent weakness in U.S. sales, analyst Ike Boruchow of Stern Agee met with Tiffany & Co. to understand the retailer's strategy, which could provide some take-aways for independent jewelers. Stern Agee maintains its "Buy" rating on Tiffany & Co. with a 12-month price target of $91 per share. 

In a note to clients, Boruchow said that Tiffany & Co. "is squarely focused on their own internal evolution" by  elevating its fashion jewelry product pipeline and improving the luxury experience through store remodels and employee training. Specifically, the analyst revealed that the jeweler is investing for the long-term with customer relationship management (CRM) software to create a more efficient organization and improve analytics. The CRM solution is still 18 months away from full implementation, according to the analyst.

Tiffany & Co.'s head designer, Francesca Amfitheatrof, is focused on reinterpreting existing collections "to refresh the design feel of the brand, while staying true to its heritage... Interestingly, upcoming collections will involve experimenting with mixing materials -- wood and gemstones with traditional diamonds, for example -- to better capture the female self-purchaser," Boruchow wrote. In addition, silver jewelry remains a priority, "while walking away from the entry-level silver customer."

Store associates "had been too passive" and unwilling to come out from behind the counter; however, Boruchow noted that employees are now trained and encouraged to engage shoppers more closely by making  product recommendations, sending a personalized thank you note after a sale and gaining better insight to customer behavior for tailored marketing plans.

Source: http://www.diamonds.net/News/NewsItem.aspx?ArticleID=52136
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U. S. Jewelry & Watch Sales -2%
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